A Landmark Agreement

The New Zealand government yesterday signed a comprehensive free trade agreement (FTA) with China. It is the first of its kind between China and a Western country.

The FTA has been hailed as a landmark deal which will provide the New Zealand economy with considerable economic benefits. About 35% of NZ goods will be tariff free by October 2008, with another 31% by 2013, with most of the remainder by 2019. In return, New Zealand will eliminate all tariffs on products of Chinese origin by 2016.

One thing that intrigues me is what the FTA signals about New Zealand's view of the Asia-Pacific strategic environment. Unlike Australia, which focused on agreeing an FTA with the United States, New Zealand elected to strike a deal with China. New Zealand Prime Minister Helen Clark said that the FTA is a strategic move which acknowledges that China will become the world's biggest economy. She also said that it's in New Zealand's interests to have a strong relationship with China.

Many Asian countries, realizing that China is becoming a force to be reckoned with, have gradually orientated themselves towards Beijing. At the same time, they've moved to safeguard their independence by developing conventional military capabilities, and strengthening relationships with other great powers, such as the US.

With this FTA, New Zealand also seems to be orientating towards Beijing. But Clark, who is an astute observer of international affairs, will understand that the US continues to be a powerful regional presence, and that the fears and ambitions of other rising Asian powers, like Japan, India, and South Korea, have to be considered.

In an era of heightened Chinese power, and great power rivalry in the Asia-Pacific, a strategic issue for New Zealand is figuring out what is needed to safeguard our sovereignty - meaning our capacity to act independently, and protect our territorial, maritime and resource interests.

Comments

[ElamBend]

IIRC, Clark did try to make NZ part of the trade agreement with USA, but was partially rebuffed. I would not be surprised to see one eventually inked.

[Kotare]

Thanks for your comment, EB. The Labour-led coalition government expressed interest in joining the Australia-US agreement, and in negotiating a separate FTA with the US. For a number of reasons, the NZ government quickly realised that neither was a goer, although it hasn't ruled out the possibility of US-NZ FTA negotiations at some point.